The surprise announcement Monday morning that Take-Two Interactive Software was acquiring Zynga shocked people—not just because of its unexpected nature, but because of the high premium the publisher of Grand Theft Auto put on the company behind Words With Friends.
With an offer that represented a 64% premium to Zynga’s closing price on Friday, it would be the most expensive takeover in the video game industry’s history—50% more than Microsoft paid for ZeniMax and nearly six times what Facebook paid for Oculus. Investors balked, with Take-Two stock falling 13%, but CEO Strauss Zelnick says the price was a fair one—and that the merger makes sense.
“It really comes down to the expectations around their net bookings and cash flow,” he told Fast Company. “I’m not going to be critical of anyone else’s deals, but on that basis, this compares exceedingly favorably.”
Financials aside, bringing Zynga in-house will represent a big change in the way Take-Two does business….